Study shows developers' softening outlook

China's property market was a roller-coaster ride in the first half of this year. Housing sales spiked in the first quarter before cooling down in the second. The surging housing prices in some second-tier cities have resulted in a new round of local tightening measures.

To assess the developments in the first half and gauge developers' expectations from the second half, we (Standard Chartered China) conducted a semi-annual proprietary survey of China's property market in July with the focus on unlisted developers in lower-tier cities.

The survey shows developers' construction activity accelerated in the first half, and the momentum is expected to be sustained in the second. Construction of new projects improved in the first half, and the completion rate of the total floor space of newly started construction increased to 36 percent - from 18 percent growth in the first half of 2015 and 23 percent in first half in 2014. This momentum is expected to continue during the rest of this year, as the completion of projects under construction will boost sales revenue for developers.